HomeDecisionsMD2317 Commitment of the ERDF to applications under call 6

MD2317 Commitment of the ERDF to applications under call 6

Type of decision:

Mayoral decision

Code:

MD2317

Date signed:

26 July 2018

Decision by:

Sadiq Khan, Mayor of London

Executive summary

This Mayoral Decision seeks approval for the award of European Regional Development Funding (ERDF) to applicants from the sixth call for proposals.

Mayoral Decision 1583 (March 2016) approved the designation of the Greater London Authority as an Intermediate Body for London’s share of the 2014-20 England ERDF programme.

The Greater London Authority’s functions as an Intermediate Body are set out in a Memorandum of Understanding with the ERDF Managing Authority, the Ministry of Housing, Communities and Local Government.

Decision

The Mayor approves:

1. The commitment and award of up to £14.1m ERDF to applicants of the sixth call for proposals to support jobs and growth, as set out in Part 2; and

2. That following on from the award of funding, officers of the Greater London Authority’s European Programmes Management Unit will manage the Funding Agreements in accordance with the delegations set out in MD1583.

Part 1:
Non-confidential facts and advice

Introduction and background

The Greater London Authority (GLA) has been designated an Intermediate Body (IB) by the Ministry of Housing, Communities and Local Government (MHCLG) for the award, management and administration of European Regional Development Fund (ERDF) of London’s share of the 2014-20 England ERDF programme.

Previous Mayoral Decisions

This request follows on from Mayoral Decision 1583 (March 2016) where the previous Mayor:

• Approved the designation of the GLA as an IB for the 2014-20 ERDF programmes, and the entering into a Memorandum of Understanding (MOU) between the GLA and MHCLG;

• Approved the delegation to the GLA Head of Paid Service to sign the aforementioned MOU; and

• Approved the delegation limits for administration of the approved ERDF expenditure.

Subsequent Mayoral Decision 1613 (also March 2016) committed up to £286 million of ERDF and European Social Fund to co-financing organisations and projects. Mayoral Decision 2039 (October 2016) further approved the award of up to £24.4 million ERDF to projects. Mayoral Decision 2145 (August 2017) approved the award of £6.5 million ERDF.

ERDF sixth call for proposals

In September 2017, MHCLG, as ERDF Managing Authority, launched the sixth call for proposals in London. This followed preparatory work by GLA officers in consultation with the London European Structural and Investment Funds (ESIF) Committee (LEC). The committee comprises local partners reflective of the priorities of the England ERDF Operational Programme, and is a sub-committee of the London Economic Action Partnership (LEAP).

For the first time in the 2014-20 programme, MHCLG allowed existing Grant Recipients - which met MHCLG’s prescribed eligibility criteria - to apply for additional ERDF and to extend the lifetime of their projects.

£23.6 million ERDF was available across four Priority Axes of the ERDF Operational Programme (£5m for ‘Promoting Research & Innovation’; £900k for ‘Enhancing Access To, and Use and Quality of, Information and Communications Technology’; £4m for Enhancing the Competitiveness of Small and Medium Enterprises; and £11.7m for ‘Supporting the Shift towards a Low Carbon Economy’). The Priority Axes included the indicative activities on which the funding may be spent. The call was open to all eligible applicants (as defined by MHCLG in guidance available on gov.uk). The specification (including output targets and permitted activities), national eligibility rules and guidance, application forms, selection criteria were also published by MHCLG on gov.uk.

The MHCLG application process comprised two stages: Outline Application and if successful, a Full Application. Outline Applications were submitted to the GLA in December 2017, and assessed by GLA officers. In line with MHCLG’s requirements, the advice of the London ESIF Committee on the strategic fit of the applications (against the Operational Programme and the London ESIF Strategy) was sought. Based on the assessment and strategic fit, the GLA invited successful applicants to progress to the Full Application stage. Full Applications were submitted in March 2018, and officers’ appraisal commenced in line with work instructions and guidance.

This Mayoral Decision seeks approval for the commitment of ERDF to the applicants which were successful at the Outline Application stage, and which have submitted Full Applications (they are listed in Part 2). Assuming satisfactory appraisal, a Funding Agreement will be issued (or a contract variation to existing Grant Recipients) to the applicant organisations, after Mayoral Decision approval, setting out the terms, conditions and monitoring requirements against which the ERDF grant is awarded.

Once ERDF Funding Agreements and contract variations have been issued, they will be listed on the LEAP website at www.lep.london.

The GLA will also be entering into a data processing agreement with MHCLG (and DWP for ESF) following the coming into force of the General Data Protection Regulation/Data Protection Act 2018.

Objectives and expected outcomes

The objective of the ERDF programme is to focus on investment to support economic growth and job creation.

All ERDF applications are required to meet the objectives of the national ERDF Operational Programme which was written by MHCLG and agreed with the European Commission in 2015. Applicants are required to explain how they will contribute to the overall expenditure targets and outputs of the London share of the ERDF programme.

Equality comments

The ERDF Operational Programme sets out the requirements for adherence to mandatory equalities ‘cross-cutting’ themes. ERDF promotes equality in accordance with European Union and national requirements.

Furthermore, the GLA as a public authority must comply with the Public Sector Equality Duty set out in section 149 (1) Equality Act 2010. This provides that, in the exercise of their functions, public authorities must have due regard to the need to:

• Eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010;
• Advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; and
• Foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

The obligation in section 149(1) is placed upon the Mayor, as decision maker. Due regard must be had at the time a particular decision is being considered. The duty is non-delegable and must be exercised with an open mind.

This duty applies in the delivery of ERDF and means that delivery of the Operational Programme at local level, including in London, must consider the needs of all individuals and have due regard to the need to eliminate discrimination, advance equality of opportunity, and foster good relations between different people. Where a project has a particular objective to work with people with specific protected characteristics, this will be inherent in the project application; Grant Recipients will be expected to capture this data as part of their project management.

Other considerations

a) Key Risks and Issues

The European Council endorsement of the latest draft of the Withdrawal Agreement in March 2018 means, subject to final agreement, the UK is expected to continue to participate in 2014-20 EU programmes until their scheduled end in 2023; beyond the expected ‘Brexit date’ of 29 March 2019. Should the ERDF programme not continue, for example following a ‘no deal’, MHCLG, as Managing Authority, will be responsible for advising GLA, and covering any ERDF-related financial implications for projects.

As Funding Agreements and contract variations have yet to be issued, it is feasible that one or more applicant may withdraw from the appraisal process. Likewise, officers may withdraw applications from the appraisal process (which involves checks on compliance with ERDF eligibility rules, national law and guidance and that the project activities are deliverable).

The amount of ERDF awarded to each applicant may be revised during the appraisal process as officers negotiate the Funding Agreements (for example, applicants may seek alternative amounts for their own organisational budgetary reasons). Any requests will be considered by officers, and collectively they are not expected to exceed the amount stated on the cover page of this Mayoral Decision. Any increase would be approved in line with the delegations listed in Mayoral Decision 1583.

Once Funding Agreements and contract variations have been issued and signed, officers will monitor the delivery of the projects to ensure compliance. It is common for ERDF projects to seek one or more contract variation during their lifetime (for example, revising expenditure and output profiles). Officers will manage this process in accordance with the process set out in the Funding Agreement and in line with work instructions; and by ensuring a GLA officer with appropriate delegated authority approves any variation.

b) Links to Strategies and Strategic Plan

The projects approved for ERDF contribute to London’s share of the national ERDF Operational Programme targets, under which calls are launched. As part of their appraisal, all projects are assessed on their alignment with the LEP’s ESIF Strategy which, in turn, supports Mayoral economic objectives for a competitive and fairer London. A consultation on the ESIF Strategy was undertaken in 2013; the feedback was taken on board in the final drafting of the strategy submitted to MHCLG in January 2014. All LEPs’ ESIF Strategies were re-submitted, following changes in the formatting of the document, at Government’s request in April 2016.

c) Impact Assessments and Consultation

In accordance with MHCLG requirements, the views of the LEC are sought on the strategic fit of applications for ERDF. The comments of the LEC were considered in decisions regarding the approval of projects.

Financial comments

Approval is being sought for the commitment and award of ERDF up to a total of £14.1 million for the successful applicants of the sixth Call for Proposals, supporting economic growth and job creation. Further details set out in Part 2.

The GLA is the designated Intermediate Body for the management and administration of the 2014-20 ERDF on behalf of MHCLG. The European Programmes Management Unit (EPMU) will continue to be responsible for managing the programme on behalf of the GLA

Should changes in the sterling/euro exchange rate result in fluctuations in individual claims, and in turn the overall total level of funding required, EPMU officers should ensure variations are authorised in line with the financial delegation limits laid out in MD1583. Any gains or losses in sterling/euro exchange rate fluctuations will be contained and manged by MHCLG.

Legal comments

Sections 1 to 4 of this report indicate that the decisions requested of the Mayor concern the exercise of the GLA’s general powers, falling within the GLA’s statutory powers to do such things considered to further or which are facilitative of, conductive or incidental to the promotion of economic development and wealth creation, social development or the promotion of the improvement of the environment, all in Greater London and in formulating the proposals in respect of which a decision is sought officers have complied with the GLA’s statutory duties to:

• Pay due regard to the principle that there should be equality of opportunity for all people; and
• Consult with appropriate bodies.

In taking the decisions requested, the Mayor must have due regard to the Public Sector Equality Duty; namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion) or share it and foster good relations between persons who share a relevant protected characteristic and persons who do not share it (section 149 of the Equality Act 2010). To this end, the Mayor should have particular regard to section 3 (above) of this report.

Paragraphs 1 to 4 above indicates that the contribution of £14.1 million to up to eleven applicants amounts to the provision of grant funding and not payment for services. Officers must ensure that the ERDF funding is distributed fairly, transparently and in accordance with the ERDF and MHCLG requirements. Officers shall ensure funding agreements are put in place or existing agreements varied (as applicable) with the grant recipients as set out in Part 2 before any commitment to fund is made.

Planned delivery approach and next steps

Following Mayoral approval, ERDF Funding Agreements will be issued and signed with applicants. GLA will then manage projects in line with MHCLG instructions and guidance; and in respect of the delegation limits set out in Mayoral Decision 1583.